TECHNOLOGY

Study: Grocers fail to meet shoppers’ fresh needs

BY Deena M. Amato-McCoy

Many grocery retailers are still missing the mark when it comes to meeting a key shopper demand.

Specifically, 81% of shoppers said they are unable to get produce they want in store, online and at discount retailers, yet 91% of grocery retail professionals are confident they are meeting customer expectations of availability.

This disconnect was revealed in an international survey of 4,000 consumers by Blue Yonder. The research explored consumer shopping habits online and in supermarkets, discount retailers and mass merchants across the United States, United Kingdom, France and Germany.

Shopping experiences both online and in-store are not only failing to meet customer expectations of purchasing goods anytime, anywhere, but 35% of shoppers stated they are let down at least once a week. Sixty nine percent (69%) said there is a lack of availability online, while 85% found the same struggles in supermarkets.

Replenishment practices are also lacking across supermarket chains, as 30% of all shoppers abandoned their carts if they were unable to find the produce they wanted. Meanwhile, 28% saying that they felt unsatisfied when buying a similar product as a substitute, data revealed.

Lacking produce availability can have wider implications for profitability. It has prompted 20% of shoppers to stop shopping with a retailer permanently or for a period of time. This figure rises to 31% for online retailers, the report said.

“We all understand replenishment is incredibly difficult to get right, especially in regards to fresh grocery,” said Professor Michael Feindt, chief scientific advisor and founder of Blue Yonder. “Disruptive shopping behaviors have made increases in demand more variable while grocery shopping missions based on trust, freshness, choice and – of course – value, all add to the complexity of replenishment decisions.”

This is only exacerbated by increased competition from new market entrants — especially those who utilize data-driven approaches and automation at their core. Meanwhile, 46% of grocery directors still drive their replenishment decisions by gut feeling, according to a previous study of 750 grocery retailers.

To overcome this challenge, retailers should adopt artificial intelligence and machine learning technology that “learns” from customer data and predicts their behavior — a practice that empowers grocers to determine the effect of each consideration, on each product, across all locations.

Machine learning can effectively incorporate factors that gut feeling can’t, such as the impact of weather, holidays and promotions. This can be done on a daily basis, resulting in hundreds of millions of daily forecasts. Retailers using machine learning have seen a reduction of up to 80% in out-of-stock rates without increasing waste or inventory, the study said.

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SUPPLY CHAIN

FedEx to offer package dropoff, pickup at Walgreens

BY Michael Johnsen

FedEx Corp. and Walgreens on Wednesday announced a long-term alliance agreement that will offer convenient access to FedEx dropoff and pickup services at thousands of Walgreens locations across the United States beginning within the next several months.

“Walgreens, with its strong focus on customer care, is the perfect retailer to help us continue to meet the growing demand for convenient, secure dropoff and pickup options, and our research has shown that customers rank pharmacies as a preferred location for accessing their e-commerce shipments,” stated Raj Subramaniam, executive VP chief marketing and communications officer, FedEx Corporation.

“Working with FedEx to provide safe and secure delivery locations while making it easy for customers to ship returns and other packages through the FedEx networks is another way we are becoming America’s most loved pharmacy-led health, well-being and beauty retailer,” added Reuben Slone, Walgreens senior VP supply chain.

By bringing together Walgreens convenient network of retail locations across the country and FedEx as one of the leading enablers of the rapidly growing e-commerce economy, this new alliance will significantly expand the options available to consumers to drop off and pick up their FedEx shipments and handle multiple tasks during a single store visit. As part of the FedEx Onsite program, customers will be able to drop off pre-packaged and pre-labeled shipments at Walgreens stores and pick up packages that they direct to their neighborhood Walgreens.

After an initial, small-scale rollout this spring, Walgreens and FedEx expect to have the program available at thousands of Walgreens locations later this calendar year and chainwide at nearly 8,000 Walgreens stores by the fall of 2018.

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WORKFORCE

Report: Walmart to cut hundreds of jobs

BY Marianne Wilson

Wal-Mart Stores is reportedly planning a major round of job layoffs by the end of this month.

The retailer will eliminate positions at its headquarters and among regional personnel that support stores, the Wall Street Journal reported.

"As we've previously shared, we are always looking for ways to operate more efficiently and effectively,” Wal-Mart said in a statement to CNBC. “While we continually look at our corporate structure, we have not made any announcements."

In September, the discounter said it was eliminating about 7,000 back-office jobs, mostly in accounting and invoicing positions at its U.S. stores, as part of a program it announced earlier in the year.

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